Stockman's filings don't explain his income

1of6Stockman was elected to represent the 36th Congressional District in 2012. He didn’t file his required campaign financial disclosure forms until April 2013 – nearly a year after the deadline for those reports.Photo: BE

2of6These bare bones disclosures from 2013 show that Stockman lists all of his 2011 and 2012 salary and fees - $350,000 as coming from an entity called Presidential Trust Marketing.Photo: City of Webster, Obtained via public information request

3of6A screen capture from a web site called conservativesinaction.org (from Dec. 2004) in which Stockman’s name and Webster P.O. Box was used to raise money for conservative causes.Photo: conservativesinaction.org

5of6Stockman’s spokesman announced that Jason Posey was fired in October from Stockman’s congressional staff after disclosures showed Posey improperly contributed to Stockman’s campaign. Posey remains Stockman’s 2013 campaign treasurer. He also has been Stockman’s business partner, records show.

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Both as a candidate and as a congressman, Rep. Steve Stockman of Clear Lake has failed to make federally required disclosures about business affiliations that stretch from Texas to the British Virgin Islands, and has provided no details about the business he claims as his sole source of income.

Stockman returned to office in 2013 after 16 years away from Congress - crediting a low-budget, come-from-behind campaign to which he claimed to have lent more than $100,000 of his own money.

Stockman failed to file a federal disclosure form during his candidacy in 2012 when he ran for the newly created District 36, which stretches east and north from Southeast Harris County, around Beaumont, and beyond to the Louisiana line.

Every other Texan in Congress, whether incumbent or freshman, filed a report in 2012.

Stockman already was serving as a U.S. representative when in April and May 2013 he submitted bare-bones reports for his candidacy, nearly a year after the deadline. Those listed all of his income in 2011 and 2012 as $350,000 in salary and fees from an unexplained entity called "Presidential Trust Marketing." He then filed two more disclosures as a congressman, in June and September.

All of the forms exclude information Stockman must disclose, said Kathleen Clark, a professor of law at Washington University in St. Louis. As a specialist in government ethics, Clark reviewed the forms at the Chronicle's request.

Stockman, who has an accounting degree, reported more than required about his wife's income, Clark said. But he omitted his own business relationships, bank accounts and the value of any businesses, she said.

"Did anyone review this? Has the House Ethics Committee followed up? It just seems very odd. I would have a lot of questions for him," said Clark, who is based in Washington, D.C. "There are many things about the disclosure that I don't understand."

Brett Kappel, another Washington, D.C.-based attorney who specializes in campaign finance law and disclosure rules, said Stockman should have been fined for failing to file a disclosure as a congressional candidate in 2012. Kappel said Stockman's 2013 disclosures left out information about his active business affiliations.

"It sounds like he has no clearly identified source of income," Kappel said. "If you're an accountant, you should be aware of state and federal filing requirements (for nonprofits and for-profits) and if you are a former member of Congress you should be aware of disclosure requirements."

Rebuffs paper's queries

Under the Ethics in Government Act of 1978, every member of Congress must disclose any businesses in which he or she has an interest, even those that produce no income.

Stockman has not responded to repeated Chronicle requests for an interview about his campaign and personal finances. He also did not respond to detailed follow-up questions the Chronicle sent this week about his failure to make required disclosures.

"We're not going to accept any more of your questions," a staffer in Stockman's congressional office said Tuesday.

The Chronicle could not find any public records that document the existence of a company called "Presidential Trust Marketing." But Stockman did register the "Presidential Statutory Trust Foundation" in Wyoming. It existed from 2007 to 2009, according to state records. And in 2004, he registered a sole proprietorship in Harris County called "Presidential Trust" with a post office box in Webster, Texas, as the listed address.

Harris County records list Presidential Trust as a for-profit business. On Stockman's LinkedIn page, he describes himself as "chair at Presidential Trust" and identifies himself as working in "nonprofit organization management."

It's unknown where or how Presidential Trust or Presidential Trust Marketing conducts business, or whether they are the same company.

Stockman did not disclose an ownership interest in either entity, or specify a value, which would be required of a business owner under federal law.

The Chronicle could not find Presidential Trust in publicly searchable nonprofit databases, and the IRS has not clarified whether the organization has registered as a nonprofit.

"Presidential Trust" likely sounds familiar to Republican activists. It's the same name used by the Republican National Committee for a large fund it spends "in direct coordination with the party's presidential nominee." In 2012, the RNC raised $21 million for its presidential trust to support Mitt Romney.

But Stockman got none of his income from the RNC, according to the committee's press secretary, Kirsten Kukowski.

"We looked into this a bit, and this isn't connected with the 'Presidential Trust' which is literally just the amount of money we can use to coordinate with the GOP presidential nominee. ... The FEC tells us how much money we can use to coordinate with the presidential campaign and we call that the 'Presidential Trust' so our donors know their money is going to the presidential campaign and nothing else," Kukowski said.

In 2004 and 2005, Stockman, or someone using the name "Presidential Trust Foundation" and Stockman's name, sought monthly contributions and one-time donations for conservative political projects via a website called ConservativesinAction.org.

Urges donors' support

An archived version of one of the fundraising Web pages from 2005 quoted "Congressman Steve Stockman" (which he was not at the time) as saying: "Like our Founding Father's (sic) vision and moral clarity join us in promoting freedom and love for our great nation. Your support will help preserve America's great culture - it is a shared duty and honor to give sacrificially to defend our great nation."

Potential donors were supplied with Presidential Trust's Webster post office box number, the same one Stockman has used for various purposes over the years.

The same Web pages sought donations via the same post office box to help produce or pre-order copies of a video called "Twisted-Michael Moore Exposed," promising it would reveal the "tragic propaganda" of filmmaker Michael Moore. There is no indication that such a video was ever produced.

On the same Web pages, donors were urged to "Support Presidential Trust Foundation efforts with a gift every month" using a major credit card or "automatic monthly bank transfers."

As a member of the House of Representatives, Stockman serves on the Science, Space and Technology and Foreign Affairs committees, and describes himself as a pro-gun conservative and a free thinker.

His office regularly tweets his opinions, including his opposition to what he has described as overzealous enforcement of certain federal laws.

Defeat and bankruptcy

Stockman was first elected to Congress in November 1994, pulling off a dramatic upset of a longtime Democratic incumbent. He served from 1995-97 as part of Newt Gingrich's so-called Republican revolution, but was defeated in a bid for re-election.

After leaving office, Stockman made at least $50,000 as a political consultant, campaign finance reports filed by a client show. The client was defeated, and Stockman's fortunes apparently declined after that.

In 2000, he claimed an income of $50,000 and earned nothing at all in 2001 or 2002, according to his subsequent bankruptcy filing.

By 2000, Stockman had begun a company in Harris County, Spool International, described in Stockman campaign literature as a fiber optics company. By 2001 Stockman had been sued in Harris County after allegedly issuing a bad check to pay for a monthly lease on a "Ditch Witch," a digging machine, that Stockman had obtained for that business, according to the civil suit and his subsequent bankruptcy. The Texas Workforce Commission placed a lien against Stockman for failing to pay an employee.

One busy P.O. box

In April 2002, Stockman and his wife had filed for a Chapter 7 - "liquidation" - bankruptcy. At the time, the couple declared less than $200,000 in assets and nearly $580,000 in debts. including the digging machine debts of $140,501, and credit card bills of $147,370, bankruptcy court records show.

Their bankruptcy was later discharged, and the civil suit was dismissed.

That 2002 bankruptcy was raised as an issue when Stockman again ran for Congress in 2012. Stockman blamed his financial hardship on expenses incurred caring for his father, described in campaign literature as a World War II veteran who suffered from Alzheimer's disease and died in 2004.

"My father raised me with the morals and convictions I have today and I'd gladly go bankrupt again to take care of my Dad," Stockman said, according to campaign literature.

Presidential Trust is only one of at least 17 different business names and corporate identities Stockman has established over the years in Texas, Virginia, Nevada, New Mexico and the British Virgin Islands. At least 10 remain active, according to public records.

Most are based at the Webster post office box or at a UPS store mailbox in Friendswood, which was also Stockman's official 2012 campaign address, public records show.

Stockman names only Presidential Trust Marketing as providing any recent income, according to his 2013 disclosures.

Some of Stockman's companies had ambitious plans that never materialized, according to news stories, press releases and Internet touts.

Within a year after his bankruptcy, Stockman had established at least three new businesses.

One of his 2003 businesses, based at an address in the British Virgin Islands, was called Chasseur Wilshire Ltd. At one time, that startup company had a small office at 11999 Katy Freeway in Houston.

A former employee interviewed by the Chronicle said the company was trying to line up buyers for petrochemical scraps in China. The woman said she worked for the company for about three weeks as a new college graduate, but the company didn't have any leads and was unable to continue to pay her salary after that.

In May 2003, Stockman co-founded a Nevada corporation called "Cherokee Solutions" with Jason Posey, a longtime political associate who is currently Stockman's campaign treasurer and served as a congressional staffer (Posey was fired in October from Stockman's staff after filing disclosures in which he admitted to improperly contributing to Stockman's campaign after initially misattributing the donation to a relative.) Their Nevada company lasted only two years, state records show.

Failed biogas venture

Among the companies Stockman did not list in his disclosures is a New Mexico limited liability company he co-founded with a partner in 2009 called Petro Verde LLC.

That venture made the news in New Mexico after Bob Cornelius, who runs a public relations and marketing company in Albuquerque, ran unsuccessfully as the state's land commissioner and touted Stockman's project on his campaign website as an alternative energy company that would build a biogas plant and "create hundreds of jobs and millions of dollars in annual revenue for the city of Clovis," according to published reports.

Cornelius said he and Stockman visited with various public officials in New Mexico to discuss the company's proposals, according to a letter he sent to the Santa Fe Reporter newsweekly in response to stories about his campaign.

No biogas plant was subsequently built in Clovis. New Mexico officials told the Chronicle that Petro Verde never applied for the permits it would need to build such a plant.

Cornelius did not return phone calls from the Chronicle seeking updates on the status of the project. The company still exists.

Nelson Spear, an attorney and oil and gas investor who became interested in the project in 2010, told the Chronicle he confronted Cornelius about claims he'd made about Petro Verde that appeared unsupported.

He called the project "a fly-by-night idea ... an idea that a couple guys had, but it didn't go anywhere."